Small Business Glossary and Definitions

A Job Evaluation is a review of a job to determine its value to an organization as well as its value in the broader industry and geographic market.

A job evaluation is typically performed to establish where a job fits within a job classification structure. Methods used for evaluation can include assigning a rank, comparison to similar jobs, or identifying particular skills required. An important goal for job evaluation is to establish compensation equity among employees within an organization.

Once these factors are established, a compensation review can be performed by either assigning the job to a classification of existing jobs with similar responsibilities or researching the compensation for similar jobs in the broader market. The evaluation is often a basis for salary and compensation negotiation with employees.